Transaction cards, such as credit cards, charge cards, debit cards, stored value cards, smart cards, and the like, are often used to conveniently purchase goods for delivery. However, such transactions inherently possess some degree of risk, since buyer information used to conduct the transaction is typically contained on the face of the transaction card. If the transaction card is stolen or lost, an unauthorized user may often complete purchases by presenting the transaction card number to a merchant. Unauthorized transaction card use is more difficult when the unauthorized user presents the card to the merchant in person, since the merchant may require further identification, such as a driver's license, and may compare the signature on the receipt to that on the back of the card. However, if an unauthorized card user purchases from a remote location via an electronic medium, such as the telephone, the Internet, or another card not present situation, a merchant cannot use these conventional techniques for avoiding transaction card fraud.
One method for preventing fraudulent electronic transaction card transactions is to verify the billing address of the card-holder. In some currently available systems requiring address verification, purchasers must provide their billing addresses along with their transaction card information when making a purchase via phone or Internet. Financial institutions that issue transaction cards have billing addresses for each of their card-holders stored in a database, along with associated card-holder information. Typically, when transaction card information is presented to the financial institution from a merchant for authorization, the stored billing address associated with the transaction card number submitted for authorization is compared with the billing address input by the purchaser to verify a match. If the addresses do not correlate, then the purchaser is deemed to be an unauthorized user, and the merchant and/or the card issuer may deny approval of the transaction.
Furthermore, transaction card issuers often give merchants payment guarantees, so long as purchased goods are shipped only to billing addresses. The card issuer offers such guarantees because the billing address typically can be verified as part of the authorization process, using methods like the one described above. However, if a merchant agrees to ship goods to an address other than the transaction card billing address, the card issuer typically refuses to make a payment guarantee, and, thus, the merchant is responsible if fraud occurs. As a result, many merchants refuse to ship goods to addresses other than the billing address. This makes many transactions difficult. For example, a card-holder might not be able to use a transaction card over the phone to buy a gift for delivery to a friend at another address.
In view of the foregoing, a need exists for systems and methods for verifying alternate addresses, as well as billing addresses, during authorization of remote transaction card purchases. Moreover, a need exists for a method that facilitates the reduction of transaction card fraud and enhances the ability of transaction card companies to make payment guarantees to merchants who ship items to addresses other than billing addresses.